SMALL-CAP WINNERS & LOSERS: XP Power sees double-digit revenue decline

(Alliance News) - The following stocks are the leading risers and fallers among London Main Market small-caps on Wednesday.

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SMALL-CAP - WINNERS

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Severfield PLC, up 16% at 23.10 pence, 12-month range 18.30p-89.80p. Expects to post underlying pretax profit between GBP18 million and GBP20 million for the financial year that ended March 29, in line with its revised March guidance and at least 45% lower than GBP36.5 million in financial 2024. The structural steel contractor says it will continue to target cost reductions to mitigate the effects of current "trading pressures", intending to reduce its group headcount by around 6% via redundancies and the non-recruitment of current vacancies. Its bridge remedial works programme is progressing "as expected", with testing and remedial costs net of insurance proceeds still "broadly unchanged" at an estimated around GBP20 million non-underlying net expense. The firm notes it has incurred testing and remedial cash costs of around GBP18 million in financial 2025, with the remained to be incurred in financial 2026 and 2027. Its financial 2026 outlook remains unchanged from its March guidance, which forecast underlying pretax profit lower than in 2025. Severfield says it has secured "some attractive large projects" for financial 2027, and looks to "significant future opportunities" in the manufacturing, commercial office and data centre sectors.

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ASA International Group PLC, up 6.8% at 110.00p, 12-month range 56.00p-110.00p. Pretax profit nearly doubles to USD63.5 million during 2024, from USD32.2 million in 2023. Net interest income grows 23% to USD170.4 million from USD138.9 million, and net operating income rises 26% to USD180.9 million from USD143.2 million. Declares a final dividend of 4.1 US cents per share, bringing the total dividend for the year to 7.1 cents per share. ASA declared no dividends in 2023. "2024 was an outstanding year for ASA International with both strong operational growth as well as significantly increased profitability. The overall operating environment across most of our markets clearly improved," says Chief Executive Officer Rob Keijsers. "Looking forward to 2025, we expect to see growing demand for loans and ever greater productivity across the organisation as we drive efficiency in the branch network and therefore reduce our cost-income ratio. From a digital transformation standpoint, we will build on the successes of 2024 by continuing the roll-out of the core banking system and digital platform to Tanzania and Ghana."

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SMALL-CAP - LOSERS

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XP Power Ltd, down 0.3% at 621.00p, 12-month range 600.00p-1,758.00p. Says order intake totalled GBP57.4 million during the first quarter than ended March 31, up 31% from GBP43.7 million a year prior. Revenue for the three-month period, however, declined 17% to GBP53.8 million from GBP64.6 million the year before. US sales of imported products account for around 30% of the group's revenue, but "whilst [US tariffs] may create some short-term market uncertainty, we do not believe they will impact our competitive position," the company says. XP Power notes that the US Power supply market is "heavily reliant" on overseas production. The firm remains confident in its long-term prospects, and expects its current pipeline of new products and new business to support medium-term growth.

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By Emily Parsons, Alliance News reporter

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